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A new report confirms the critical importance of offshore wind in replacing aging power plants, saving up to Â£89bn from the UK's energy bill, and has the potential to take a large share of a global Â£1 trillion market by 2050. As well as reducing reliance on imported gas and meeting GHG emissions and renewable energy targets, offshore wind could offer business opportunities of up to Â£35bn to UK companies.

A new report confirms the critical importance of offshore wind in replacing aging power plants, saving up to Â£89bn from the UK's energy bill, and has the potential to take a large share of a global Â£1 trillion market by 2050.

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As well as reducing reliance on imported gas and meeting GHG emissions and renewable energy targets, offshore wind could offer business opportunities of up to Â£35bn to UK companies.

The UK has a large natural resource of wind power around its coast, and offshore wind power is a commercially available, proven technology to capture this resource, according to a Technology Innovation Needs Assessments (TINAs) report.

The Report produced by the Low Carbon Innovation Coordination Group (LCICG) predicts that by 2050 analysis suggests offshore wind could deliver c.20-50% of total UK electricity generation.This depends primarily on the constraints (economic, technical or public acceptance) to alternatives (onshore wind, nuclear, and CCS), and on the overall energy demand.

However, it points out that offshore wind power is currently a relatively high cost source of energy. How much and how quickly it is deployed will depend on how successful innovation is in reducing costs.

"Innovation has the potential to drive down the costs of offshore wind by 25% by 2020 and 60% by 2050. Together with savings in the supply chain and financing, this could reduce the cost of energy to about Â£100/MWh by 2020 and Â£60/MWh by 2050. Such improvements would enable large deployment potential, and greatly reduce energy system costs."

Energy and Climate Change Minister Greg Barker said: "Innovation is key to the growth of the low carbon economy here in the UK. This new analysis will help us better understand the value of these technologies to our growing green economy as well as the barriers to commercialisation, helping us put our available investment in the right place to spur on further innovation."